Labelling SARS anti-corruption unit 'unlawful' was a mistake, inquiry hears

The former chairperson of the South African Revenue Service (SARS) board on Friday conceded that it was a mistake to conclude that the unit investigating the illicit economy was unlawful.

Testifying before the Nugent Commission of Inquiry, Judge Frank Kroon said the board had relied on input from suspended SARS commissioner Tom Moyane, Advocate Muzi Sikhakhane's Report and a KPMG report - which has now been withdrawn - that indicated the unit was unlawful.

The unit probing the activities such as the multi-billion rand illegal trade in tobacco and smuggling was later shut down.

Kroon stated that he would personally recommend that the unit be reopened. 

“We did not conduct our own legal assessment…in retrospect, it is something I should not have done. We made a mistake.”

In April 2015, the board issued a statement saying the existence of the unit was unlawful, which Kroon told the inquiry was "unfortunate and should not have happened".

The investigative team which later gained the notorious name the “rogue unit” had caused friction between Moyane and Pravin Gordhan who was the then-finance minister and to whom Moyane reported.

Kroon said he has since apologised to Gordhan.

“I had no reason to suspect that Mr Moyane was misleading me in any way, it would have been better for us to have instituted our own inquiry and speak to people involved.”

Judge Robert Nugent who is heading the inquiry tasked with tax administration and governance in SARS asked if the board simply assumed that the members of the unit  engaged in unlawful activity without hearing their side of the story, to which Kroon responded, “That is correct”.

He stated that his capitulation was his personal view and that he has not consulted other board members.

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